WeightWatchers is making its first foray into the growing obesity drug business business with its purchase of Sequence, a San Francisco-based subscription telehealth app that offers prescription drugs like Ozempic alongside diet and lifestyle changes.
The New York company, formally known as WW International Inc. (NASDAQ: WW), is paying $106 million in cash and stock, for Sequence parent company Weekend Health Inc., the company announced Monday in its annual report.
Sequence members pay $99 monthly for access to the company's clinicians, who are able to prescribe Ozempic and other popular weight-loss drugs such as Wegovy, Saxenda and Mounjaro if "appropriate," its website says. It also provides access to dietitians and fitness coaches.
"Nothing is changing about the Sequence program," Sequence wrote in a blog post announcing the deal. "This gives us the opportunity to invest even more in what we’ve built, and we’re incredibly excited about the next chapter ahead. Together, Sequence and WeightWatchers will continue to fulfill our joint mission of livable, sustainable, science-backed weight management."
Sequence was founded in 2021 by CEO Rémi Cossart and CTO Calvin Young. It had 24,000 members in February and is generating an annual revenue run-rate of $25 million, Reuters reported.
Weekend Health raised an undisclosed early-stage funding round from DCM Ventures, according to PitchBook.
New GLP-1 drugs like Wegovy, Saxenda and Mounjaro were developed for treating obesity but have also become popular among celebrities and others without underlying health issues to aid weight loss. The hype has led to shortages of the drugs.
WeightWatchers has tried to move away from its image as a diet company over the past several years and rebranded to WW in 2018.
“We have no interest in prescribing medications to those who are trying to lose 10 pounds for a reunion,” WW’s Chief Scientific Officer Gary Foster told the Wall Street Journal.
On Monday, WW reported that its revenue declined nearly 19% in the last quarter of 2022 compared with a year earlier and it clocked a net loss of $32.5 million, compared to net income of $29.9 million a year earlier.
The obesity treatment market is expected to reach around $50 billion by 2030, according to Reuters.
Media mogul Oprah Winfrey joined WeightWatchers in 2015 as an investor and board member.
